Coal cauldron

15 November 2017

Will democratic Myanmar be fueled by dirty energy?

PHOTO COURTESY: TARKAPAW YOUTH GROUP

(This article is part of our special package on Myanmar. Read more articles here.)

In recent years, as Myanmar has moved toward democracy, a particular four-letter word has repeatedly appeared in the news – coal. The highly-polluting lignite variety of coal is one of the many minerals mined in Myanmar. Notwithstanding public protests over the environmental damage caused by existing mines, coal has been promoted as a path to meeting the country’s energy requirements, expected to grow exponentially with increased investment in industry and domestic electrification.

With little industrial development under military rule, Myanmar’s energy production and consumption were low. In its Intended Nationally Determined Contribution formulated ahead of the 2015 United Nations Climate Change Conference in Paris, the country claimed that it barely contributed to global warming through emission of greenhouse gases. However its claim of being a beneficial ‘carbon sink’ is less tenable with the rapid destruction of its forests, with the Global Forest Resources Assessment 2015 stating the country had the third-highest rate of deforestation globally. A turn to coal-fired power plants will drastically change the country’s climate impact for the worse.

Open pits and rat holes
In 2011, when Myanmar produced 692,000 tonnes of coal, its reserves were estimated by the Asian Development Bank (ADB) to be 489 million tonnes. The deposits are in Shan, Kayah, Kachin and Chin states, and in Sagaing, Magway, Mandalay, Bago and Tanintharyi regions.

Magway Region and neighbouring Sagaing Region, which borders India’s Arunachal Pradesh, Nagaland and Manipur states, are interspersed with large open-pit operations, along with dangerous small-scale single-shaft coal mines known as ‘rat holes’. The rampant pollution caused by coal mining in Sagaing Region was recorded in a report released by a joint task-force of Myanmar’s Ministry of Mines and several environmental organisations in April 2016. The Irrawaddy quoted Win Myo Thu, a member of the joint commission and director of the Economically Progressive Ecosystem Development Group (EcoDev), saying that small- and medium-sized mining projects often receive approval from local governments even when they are blocked by the Ministry of Mines.

A joint venture of Myanmar companies the Eden Group and Shan Yoma Nagar and the China National Heavy Machinery Corporation, the Tigyit power plant is run by the Chinese Wuxi Huagaung Electric Power Engineering. The power plant near Inle Lake in southern Shan State is known to have caused severe water and air pollution in the area through its open-pit operations. In April 2016, the operating company claimed it had upgraded the plant claiming to improve its environmental standards and efficiency, but this is yet to be verified independently. The interest of Chinese companies in coal projects in Myanmar continues at a time when China is moving away from coal-fired power plants for its own energy needs.

Relying on coal would be counterproductive given the fact that Myanmar has been identified as one of the countries most affected by climate change. The think-tank Germanwatch ranked Myanmar second on its ‘Long-term Climate List Index’, which listed countries most affected due to extreme weather conditions between 1994 to 2013. Weather expert Dr Tun Lwin has warned against coal-fired power plants as a potential contributor to severe climate change in Myanmar as the country is vulnerable to disastrous floods and cyclones as well as fragile habitats, agriculture and watersheds.

While Myanmar was under military dictatorship, the powerful Ministry of Mines operated as a state monopoly with the power to grant production-sharing contracts for minerals, including coal, to private or foreign investors, keeping a 30 percent share for the government. The 1994 law on mining was amended by Myanmar’s parliamentary government in December 2015, with state participation still mandatory but more flexible, allowing direct joint ventures between foreign and local investors. The 2015 amendment increased the previous permit limit of 15 years for large-scale production to 50 years. While these changes may encourage investment in the mining sector in general, the low quality of Myanmar’s coal and remoteness of coal deposits still make large-scale coal mining a risky bet. The National League for Democracy (NLD), which took office in April 2016, changed the former Ministry of Mines to the Mining Department of the new Ministry for Natural Resources and Environmental Conservation. This may signal a shift towards conservation and transparency, though there is, as of now, little information on how the new government will meet the goals of increased energy requirements of the country in a sustainable way.

Power shiftPower cuts are routine in Myanmar’s cities while the rural areas mostly do without any electricity. According to Mizzima News, “Myanmar’s current [2015] overall generating capacity is no more than 5000 megawatts, and the electricity reaches only 25 percent of the country’s population.” Under these circumstances, portable generators are very common and are used for running lights, electrical appliances and machinery, while cooking is usually done on charcoal or wood fires. Now, with the increase in manufacturing and infrastructure-building, along with plans for increased supply for domestic use, the requirement for energy is increasing rapidly.

Myanmar’s government under Prime Minister Thein Sein formulated a National Energy Master Plan (NEMP), released in January 2016. The NEMP projected an increase in Myanmar’s energy demand from 12.2 million tonnes of oil equivalent (2012) to 21.9 million tonnes in 2030. Rural electrification was marked a high priority along with serving manufacturing needs. Coal-fired power was emphasised in the plan which targeted an energy mix of 33 percent biomass, 22 percent oil, 20 percent coal, 13 percent gas, and 11 percent hydro and just one percent non-hydro renewable energy. Though the NEMP called for environmental safeguards and transparency, it was criticised by energy sector experts for its over-reliance on coal and under-reliance on renewable sources. The policy is a departure from the country’s present situation where 69 percent of electricity is generated from hydro-power sources, 29 percent from natural gas and just two percent from coal, according a 2015 Irrawaddy article. The Japanese International Cooperation Agency, which promotes the use of ‘clean coal’ technology has been a major pro-coal influence on Myanmar’s energy sector, and was involved in formulating the NEMP.

Myanmar’s currently operative coal-fired power plants are Shan State’s Tigyit power plant and an 8-megawatt power plant at Kawthaung in Tanintharyi Region which stretches along the Andaman Sea. Proposed expansion of coal-fired power generating in Tanintharyi Region includes the Myeik power plant, a massive 2640-megawatt joint venture between companies from Thailand and Myanmar.

Multinational companies from Thailand, Japan, India, South Korea, China, Singapore and Indonesia involved in Myanmar’s many proposed or pending coal-fired power plant schemes include Tata, Mitsubishi, Marubeni, Daewoo and Electricity Generating Authority of Thailand. Investors from India are involved in proposed coal-fired power plants in the Yangon area (Orange Powergen) and Ayeyarwady Region (Tata Power.) Other proposed or pending coal-fired power plant locations include Mon and Shan states and Sagaing Region.

However, Asia Power Monitor, a regular publication on the energy industry, and other experts, have pointed out that Myanmar cannot produce enough coal – and does not have the right type of coal – to generate the ramped-up power volume proposed, and the country will have to depend heavily on imports. The National Energy Master Plan stated: “Bituminous coal would be imported for all new power plants.” According to energy industry sources, just two of the proposed power plants in Mon State and Tanintharyi Region would require importing 10 million tonnes of coal per year. This would require Myanmar to increase its capacity in ports, barges, roads and railways to enable importing and distributing coal from Indonesia, Australia, South Africa or elsewhere.

Many have pointed out the lack of logic in importing fuel for Myanmar’s energy needs. For example, even though a major offshore natural gas terminal exists at Kyauk Phu, in Arakan State, there have been talks to import coal for a proposed 1320 megawatt power plant in the region. Nay Oo Htin Lin, an activist from Arakan State, told Narinjara News, an Arakanese news agency: “The gas extracted from Kyauk Phyu can supply the whole country, [but] they do not use gas, they use coal instead.” To increase coal imports would violate energy policies set down by the previous government. As Aung Myint, secretary of the Renewable Energy Association Myanmar, pointed out in an interview with Eleven Media, the nine-point policy formulated by the National Energy Management Committee in January 2015 stated in its first point that the country must rely on local resources.

Despite attempts to sell the idea of “clean coal”, the communities potentially affected by proposed coal-fired power plants have voiced mistrust that the Japanese technology could be properly implemented in Myanmar. Win Myo Thu, director of EcoDev environmental group was quoted by Irrawaddy, as saying, “People will be worried; although the ministry makes clean [coal] claims, that same electric ministry is struggling to solve [basic] problems like electric shocks from wires. Will the public believe the ministry will take responsibility if the clean coal turns out to be dirty?” Such objections have had an impact on at least one major multilateral lender: in February 2016 the World Bank announced that it would not fund a coal-fired power plants in Myanmar, instead prioritising renewable energy sources and improving the power grid.

Energy politics

Under the previous government, at the state and region level, many politicians showed courage in opposition to coal, notably the Mon State Parliament, which vowed to prevent a power plant project in Ye Township. In Ayeyarwady Region several members of parliament from different parties successfully worked together to keep two coal-fired power plant projects from going forward. The NLD parliamentarian from Tanintharyi Region, Tin Tin Ye, called for more accountability for proposed and operational plants.

When it was an opposition party, the NLD indicated its commitment to rethinking Myanmar’s energy policy with sustainability goals. During a 2012 visit to India, Aung San Suu Kyi stated, “[Myanmar] is rich in energy resources, but also needs investment. We look for responsible investment that is not only sensitive to the environment, but also secures the future of our country. We need to learn more about handling our energy resources. [Myanmar] also needs an effective energy policy.”

It remains to be seen whether energy production will be reallocated to less destructive sources. The NLD government’s Chief Minister for Tanintharyi Region, Daw Lae Lae Maw indicated her opposition to coal in a May 2016 interview with the Myanmar Times: “I can’t allow the building of coal-fired plants in my region. [Aung San Suu Kyi] asked me about this before I become chief minister and I told her I was opposed [to it]. I would rather try to get financing for gas turbines, as gas is plentiful here.”

Myanmar’s armed groups with a long history of fighting for ethnic rights have a mixed record on the matter. The New Mon State Party, which has fought for autonomy for the Mon people of southern Myanmar, has been active in trying to prevent the establishment of a power plant in Ye township. In contrast, the Karen National Union (KNU), engaged in armed struggle for independence or autonomy for the indigenous Karen people between 1949 till the 2012 ceasefire, enabled the construction of the notorious Ban Chaung coal mine in Tanintharyi Region. The KNU’s Mergui-Tavoy District 4th Brigade in 2011 granted joint coal mining rights to two Thai companies Eastern Star and Thai Assets Mining Company and Myanmar’s Mayflower Mining Company.

The companies confiscated farmland for a 60-acre open pit coal mine. They have sought to expand the mining operation to as much as 2100 acres. Villagers, protesting land confiscation and pollution from the mine, blockaded roads used by Eastern Star’s coal mining operations in November 2014, but KNU troops cleared the blockade and provided security for the mining project. The KNU leadership at the local level has chosen profits from their arrangement with Eastern Star over defending the people’s land rights and the environment in its area of operation.

Courage against coalGrassroots organisers, environmental activists, farmers, fishing people, shopkeepers and labourers are banding together to investigate, publicise and protest coal in Myanmar. Most of them do not have electricity in their own homes, unless from portable generators, but they still consider electricity from coal unacceptable. For instance, in 2015 more than 5000 people gathered in Andin village in Mon State to protest a proposed Thai-backed coal plant. A representative of the American environmental organisation Sierra Club visited the region later that year: “After a 10-hour overnight drive from Yangon, we finally arrive in Andin village… Nearly every house in the village has a “No Coal” sticker in the three languages [Burmese, English and Mon] – distributed as part of a survey of local opinions about the project. Out of 1300 households, we are told only one refused to place a sticker on their home. The rest display their opposition on their homes, cars and motorbikes.”

Communities and organisations in Myanmar are well-informed and vocal against the coal-fired power plants. As Devi Thant Cin of the Myanmar Green Network explained in an interview with Mizzima News, “Climate change may cause heavy rains or less rain (in part) due to gas emitted from coal-fired power plants. This will have negative impacts on the agriculture sector.”

With the impressive array of superior energy options for Myanmar, including solar, wind, small-scale hydro energy sources, and even the ‘lesser evils’ natural gas and biomass, coal-powered energy can be eliminated from the country’s energy future. If mining and energy issues are truly to be considered in the

context of conservation, as the NLD’s reconfiguration of ministries indicates, coal must be abandoned and alternatives promoted. Throughout Myanmar, opposition to coal mining and coal energy is consistent. This issue can serve as a litmus test of the present government’s responsiveness to public concerns.